EUR/USD: short covering rally

EUR/USD Current price: 1.1630

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The dollar is down across the board early US session, with the EUR/USD pair surging above the 1.1600 figure as stocks came under pressure and risk aversion rules. Some short covering ahead of ECB announcement on their economic policy tomorrow also weights in the pair.  So far today, the most relevant data came from the housing sector in the US, with new residential construction raising more than expected in December, to 4.4%. Building permits however where softer than expected and below November reading. 

Nevertheless, the EUR/USD trades in a quite tight range, contained to the upside by a strong static resistance in the 1.1640 price zone. Short term the pair presents a positive tone as per the price advancing above its 20 SMA and indicators picking up above their midlines. In the 4 hours the technical picture is also slightly bullish yet more as a consequence of latest lack of activity than of surging demand. The pair may found sellers should current recovery extend around the mentioned 1.1640 price zone.

Support levels: 1.1590 1.1550 1.1510 

Resistance levels: 1.1640 1.1680 1.1720

GBP/USD Current price: 1.5112

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The British Pound took a hit from its Central Bank this Wednesday, after BOE’s Minutes showed all of the 9 voting members choose to kept rates steady in their January meeting. Despite local employment figures actually beat expectations, the Cable sunk to a daily low of 1.5070 as the decision anticipates no rate hikes in the UK this year. The short term technical picture is bearish, as the price develops below its 20 SMA and indicators are biased lower in negative territory. In the 4 hours chart the outlook is bearish to neutral, with indicators turning south in neutral territory and the price holding below its 20 SMA ever since the news were released. 

Support levels: 1.5110 1.5070 1.5030

Resistance levels: 1.5190 1.5225 1.5250 

USD/JPY Current price: 117.34

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Japanese yen strengthened against its rivals following BOJ’s decision to remain on hold in its economic policy stance, with the USD/JPY pair approaching the 117.00 figure as US equities slide. The 1 hour chart shows that the pair trades again below its moving averages, with the 100 SMA offering immediate resistance at 117.45 and indicators heading strongly south below their midlines. In the 4 hours chart indicators had also turned sharply lower and hover now around their midlines, not yet confirming a downward continuation. A break through the 117.00 should however trigger some further declines exposing the 115.55 level for the upcoming sessions if the yen continues to advance.

Support levels: 117.00 116.60 116.15 

Resistance levels: 117.45 117.80 118.20

AUD/USD Current price: 0.8217

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The AUD/USD pair recovered the 0.8200 figure supported on rising gold, actually trading above $ 1,300/oz, but failed to advance beyond 0.8240 resistance, tested earlier in the day. The 1 hour chart presents a slightly positive tone as per price advancing above its 20 SMA and indicators aiming higher in positive territory, while the 4 hours chart maintains a neutral technical stance. Above the mentioned resistance, the pair could attempt an approach to the 0.8300 figure, where selling interest may halt the advance. 

Support levels: 0.8190 0.8145 0.8110 

Resistance levels: 0.8240 0.8290 0.8330